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The quick sale of a century-old multi-family building in Portland reflects the continued desirability of the market.
Parkside Investment Group LLC bought 77 Sherman St. from True North Properties LLC for $1.933 million.
Brokered by Brit Vitalius from Vitalius Real Estate Group and Susie Kendeigh from Portside Real Estate Group, the transaction closed Oct. 1.
The property was on the market for only a week and elicited numerous showings, said Vitalius, who represented the seller. There were four or five offers, including some above the listed price.
“The multi-family market is still hot,” he said.
In general, he said, multi-family buyers look at the return-on-investment numbers before deciding on a purchase.
The 10,200-square-foot building contains 12 two-bedroom units and is on just over one-tenth of an acre. It dates back about a century.
The brick building was marketed as “stately” and a “rare offering” in the tight Portland multi-family market.
There aren’t may opportunities to buy a brick building containing 10 units or more in Portland, said Vitalius.
“These don’t change hands very often,” he said.
The property is located on a tree-lined residential side street in Parkside, on the north side of the neighborhood’s striking Sacred Heart Catholic Church.
The seller had owned the property for 20 years and was ready to retire, he said.
The building was meticulously cared for, he added.
The rents have been below market rate. Several units were vacant before the sale, allowing the new owner to make value-add improvements.
“Structurally, it’s in incredible shape,” Vitalius said. “The front porches are gorgeous. I think the new owner will be able to invest in it and bring the interior aesthetics up to the exterior’s level.”
Although the property received above-list offers, it sold for below the listed price of $2 million.
“The buyer elected to purchase it with no financing contingency and it was a buyer we were familiar with,” said Vitalius. “Cash buyers are in a strong position because they eliminate the barriers of financing and appraisals.”
The buyers behind Parkside Investment Group LLC are a young couple who live in the Portland area and who own several investment properties and are growing their portfolio, said Kendeigh, who represented the couple in the deal. One works in the corporate world. They moved to Maine less than 10 years ago.
“They have family in Maine,” she said.
Kendeigh has worked with the couple for several years, brokering about 10 properties with them.
“They’re up to over 30 units now,” she said. “They have a diverse portfolio and they’re very savvy investors.”
Their overall portfolio ranges from single- to multi-families across a number of buildings in southern Maine.
“This is their first large building,” she said.
Kendeigh, who also invests in the residential space, said she recommended to the couple that they invest in a larger building with more units to take advantage of economies of scale.
“I was surprised when they wanted to see this one, because they hadn’t ventured into more than six units before,” she said. “They were ready.”
The couple’s criteria for a property include a location in the greater Portland area; their holdings currently range from Scarborough to Yarmouth. They also look for an opportunity to make money.
“They’re very analytical,” she said. “They have formulas to determine if it’s going to be a good investment for them. But they’re willing to invest and update a building. The buildings they’ve purchased haven’t all been in pristine condition.”
Highlights of the Sherman Street building, she said, include its brick exterior, first- and second-story street-facing porches, and hardwood floors.
The buyers plan upgrades for the vacant units, including fresh paint and kitchen and bathroom overhauls, she said. The roof needs some patching. A new boiler and hot-water heater are going in.
The per-unit price of $161,000 is high for Sherman Street, she said, “but that’s the state of the market right now. Portland’s a booming town.”
Vitalius brokered another multi-family deal that came together in just a week.
A 5,722-square-foot, six-unit brick row house at 20 Pine St. in Portland’s West End sold for $1.1 million. The deal closed Oct. 21.
The property was marketed as a “historic gem on the outside” with residential units that were all redesigned and rebuilt in the late 1980s.
“The result is a classic Portland property an investor will be proud to own while also being simple to manage and efficient to operate,” the marketing brochure said. “Potential opportunities include executive rentals, short-term rentals or a condo conversion.”
The seller leased off-site parking space for each unit.
The seller had owned the property for 27 years, was looking to retire and felt the time was right, said Vitalius.
Like the buyers of the Sherman Street property, this buyer is a young investor looking to build his portfolio, he added.
The property was initially listed for $1.3 million just about the time the pandemic started, but was pulled off the market due to the concerns for the tenants during the health crisis, Vitalius explained.
Within the first week of going back on the market, it went under contract at the new listing price of $1.1 million, he said.
Interest was lighter than expected.
“It’s one in a beautiful series of row houses on Pine Street,” Vitalius said. “There had been a fire, we believe in the early 1980s, and the inside was all new. So for a buyer to get both a beautiful brick building yet have the inside be new sheetrock, plumbing and wiring was very attractive.”